(Reuters) - Halliburton Co (HAL.N), the world’s No.2 oilfield services provider, reported a bigger-than-expected 36 percent drop in quarterly revenue, hurt by weak drilling and pricing in North America.
Halliburton and bigger rival Schlumberger Ltd’s (SLB.N) disappointing results highlight the struggles of the oil and gas industry, which is seeing little hope of a rebound in crude oil prices
The outlook for the battered industry continues to look gloomy even as Venezuela, an OPEC partner, plans to set a price band of $70 per barrel to stabilize the oil market.
Analysts have said the plan would be doomed from the start as Saudi Arabia, the group’s de facto leader, has so far shown zero interest in returning to a strategy of supporting prices.
Brent oil LCOc1 was down 3.1 percent at $48.87 per barrel on Monday.
Halliburton further cut its 2015 capital budget by $200 million to $2.4 billion and said it had reduced global headcount by 21 percent since the beginning of the year.
The company also said fourth-quarter revenue and margins were likely to be flat to modestly low compared with the prior quarter.
“In North America, the prospects of reduced borrowing capacity for operators in a prolonged holiday season make the fourth quarter challenging and difficult to predict,” Halliburton’s acting CFO Christian Garcia, said.
Chief Executive David Lesar said he expected customer budgets to reload in the first quarter, leading to a recovery in the second half of 2016.
However, industry leader Schlumberger, which posted a 33 percent drop in quarterly revenue last week, said it did not expect a recovery in demand before 2017.
Halliburton’s revenue in North America almost halved to $2.49 billion in the third quarter. The region accounts for about half of the company’s total revenue.
The company said it was working on getting regulatory approvals for its acquisition of smaller rival Baker Hughes Inc BHI.N.
Halliburton’s revenue fell to $5.58 billion from $8.70 billion.
Net loss was $54 million, or 6 cents per share, attributable to the company, compared with a year-earlier profit, as it took charges related to asset write-offs and severance costs.
Excluding items, Halliburton earned 31 cents per share.
Analysts on average had expected a profit of 27 cents per share and revenue of $5.64 billion, according to Thomson Reuters I/B/E/S.
Halliburton’s shares were down nearly 2 percent at $37.05 in morning trading on the New York Stock Exchange.
Reporting by Sneha Banerjee and Kanika Sikka, additional reporting by Amrutha Gayathri in Bengaluru; Editing by Anil D'Silva and Kirti Pandey